- Afcome – Reims, France – October 21st - 23rd 2015 -
José de Sousa
IFA Secretariat
Global Fertilizer Markets
IFA Medium-Term Outlook
Afcome 2015 – Reims, France – October 21st - 23rd 2015
- Afcome – Reims, France – October 21st - 23rd 2015 -
Fertilizers and Raw Materials Global Supply 2014 – 2019
Supply: key issues and emerging trends
Fertilizer capacity outlook
Fertilizer medium-term supply / demand
Fertilizer trade prospects
- Afcome – Reims, France – October 21st - 23rd 2015 -
Key Issues - Supply Aspects
2014/19 Operational risks and supply issues
Chronic shortfalls in natural gas supply
Mine depletion and flooding in the potash segment
Decreasing phosphate ore quality and need for ore upgrading
Energy prices fluctuations
Currency devaluation : impact on imports
Financing for junior mining projects
Trade policies and trade measures
Subsidy policies
Recent trade measures on fertilizers:
2014/15
•Argentina: DAP, MAP
•Ukraine: NPK, urea, AN
• India: urea, industrial urea
•Belarus: potash, NPK
•Vietnam: urea, DAP
•United States, Russia, Iran, Nigeria….
- Afcome – Reims, France – October 21st - 23rd 2015 -
Nitrogen capacity evolution – Natural gas and coal feedstock
0
50
100
150
200
250
2008 2010 2012 2014 2016 2018
OT CL NG
•Natural gas: +19% over 2014: 68% share
•Coal : +10% over 2014
30% share of world NH3 capacity
China: 96% share of world’s coal-based NH3
Mt N
Source: IFA Production and International Trade 2015
- Afcome – Reims, France – October 21st - 23rd 2015 -
0
50
100
150
200
250
300
350
400
Capacity
Production
Supply
Feedstock issues – Phosphate rock reserves, grade and
potential supply
220 Mt
255 Mt
Mt P rock concentrate
•Rising P rock capacity and potential supply
•Morocco, China & Saudi Arabia: 70% of increase
•Concentrate P2O5 grade: rising in near future!
30,1%
30,2%
30,3%
30,4%
30,5%
30,6%
30,7%
30,8%
30,9%P2O5 Content % in P rock concentrate
Source: IFA Production and International Trade 2015
- Afcome – Reims, France – October 21st - 23rd 2015 -
Flooding…. inherent risks of potash mining!
• Global capacity rose by a net 16 Mt K2O
between 1995 and 2015.
but
• Five underground/conventional mines were
flooded over the past 30 years in Canada
and Russia.
• Nearly one mine every 7 years.
• Capacity losses equated to 9 Mt K2O, or 15
Mt MOP.
• Unless additional ore can feed these
plants, nameplate capacity is reduced.
Berezniki 3
Potacan Berezniki 1
Solikamsk 2
0,0
0,5
1,0
1,5
2,0
2,5
3,0
1984 1988 1992 1996 2000 2004 2008 2012
Mt MOP
Source: IFA Production and International Trade 2015
- Afcome – Reims, France – October 21st - 23rd 2015 -
Fertilizer capacity developments – Nitrogen and seaborne
ammonia
Mt N
5
5
5
1
2
1
2
7
- 50 100
China
Russia
USA
India
Indonesia
Algeria
Nigeria
Other
2014
to 2019
Seven countries:75% of the new capacity
• China: 18%
• Russia: 19%
• USA: 17%
Global net increase 28 Mt to 205 Mt N
= 16% overall
Mt NH3WEST
OF SUEZ
EAST OF
SUEZWORLD
2014 11.8 6.7 18.5
2019 12.7 6.2 18.9
Source: IFA Production and International Trade 2015
- Afcome – Reims, France – October 21st - 23rd 2015 -
Fertilizer capacity developments – Urea
Mt Urea
11 to 9
1
7
3
3
2
4
2
1
9
- 40 80 120
China
India
USA
Russia
Indonesia
Egypt
Nigeria
Algeria
Brazil
Other
2014
to 2019
• Global urea capacity: +20% over 2014.
• 60 new units, of which 20 in China but at
least 5 projects are currently idled.
• Global urea capacity rises by a net 41-44 Mt
to 250 Mt in 2019.
• Capacity increases in China but 5 Mt is
removed from closure .
Sources: IFA Production and International Trade ; CNFIA 2015
- Afcome – Reims, France – October 21st - 23rd 2015 -
Fertilizer capacity developments – Processed Phosphates
1,2
3,6
1,3
1,1
0 10 20 30
Saudi Arabia
Morocco
China
Other
2014
to 2019
Mt P2O5
Processed phosphates capacity
• Processed Phosphates: +16% over 2014.
• 30 new units.
• 3 countries account for 85% of net growth.
• PP capacity rises by 7 Mt to 50 Mt in 2019.
Source: IFA Production and International Trade 2015
- Afcome – Reims, France – October 21st - 23rd 2015 -
Fertilizer capacity developments – Potash
Mt K2O
5
2
1
1
-1
-10 0 10 20 30
Canada
Russia
Belarus
China
Other
2014
to 2019
Potassium capacity
• Global K2O capacity: 52 Mt to 61 Mt : +17%.
• 25 projects worldwide; 4 greenfielfd projects.
• 4 countries: 100% of net growth.
Source: IFA Production and International Trade 2015
- Afcome – Reims, France – October 21st - 23rd 2015 -
Capacity vs. supply and production – Potash example
Mt K2O
Effective capacity
•2005-2014 : avg 86% of capacity.
•2005-2007-2011: benchmarks.
•2014 : 93% of effective capacity.
• In future: 82-83% of capacity.
0
10
20
30
40
50
60
70
2005 2007 2009 2011 2013 2015 2017 2019
Capacity
Effective capacity
Production
Source: IFA Production and International Trade 2015
- Afcome – Reims, France – October 21st - 23rd 2015 -
Potential Supply/Demand Balance – Nitrogen
Mt N
• Global nitrogen potential supply: 3% pa
• 84% of nameplate capacity
• Global nitrogen demand: 2.2% pa
• Firm industrial demand growth
Baseline scenario
• Growing surplus, accelerating after 2016
Slow-growth scenario
• Rapid growth, but static post-2017
174
157
-
20
40
60
80
100
120
140
160
180
200
2014 2015 2016 2017 2018 2019
Supply
Demand
Slow-growth supply
Source: IFA Production and International Trade 2015
- Afcome – Reims, France – October 21st - 23rd 2015 -
Potential Supply/Demand Balance – Urea
•Global urea potential supply: 3.5% pa over 2014
•81-83% of capacity
•Global urea demand growing 3.6% pa
• Industrial urea demand growing 8% pa
Baseline scenario
•Demand growth exceeds supply demand growth
•Emerging surplus by 2019
Slow-growth scenario
• static imbalance through 2019
Mt Urea
211
199
-
50
100
150
200
250
2014 2015 2016 2017 2018 2019
Supply
Demand
Slow-growth supply
Source: IFA Production and International Trade 2015
- Afcome – Reims, France – October 21st - 23rd 2015 -
Potential Supply/Demand Balance – Phosphoric acid
Mt P2O5
•Global PA supply growing 2.5% pa
•80-82% of nameplate capacity
•Global PA demand growing 2.4% pa
Baseline scenario
•Stable balance for the near term
Slow-growth scenario
•Gradually declining potential surplus
51
48
38
40
42
44
46
48
50
52
2014 2015 2016 2017 2018 2019
Supply
Demand
Slow-growth supply
Source: IFA Production and International Trade 2015
- Afcome – Reims, France – October 21st - 23rd 2015 -
52
39
0
10
20
30
40
50
60
2014 2015 2016 2017 2018 2019
Supply
Demand
slow-growth supply
Potential Supply/Demand Balance – Potassium
Mt K2O
• Global potassium potential supply growing 4.2% pa
over 2014
• 80-85% of nameplate capacity
• Global potassium demand growing 2.5% pa
Baseline scenario
• Moderate increase in potential surplus up to 2017,
then accelerating to 2019.
Slow-growth scenario
• Stable potential surplus until 2016, growing
afterward.
Source: IFA Production and International Trade 2015
- Afcome – Reims, France – October 21st - 23rd 2015 -
Key take-aways – Supply aspects
1. Global nutrient supply growing 3% per annum over 2014
2. New capacity: N (EA, NA, AF, EECA), P (AF, EA, WA); K (NA, EECA, EA)
3. Growing potential surplus on K and N; Relative balance on urea and P2O5
4. Global nutrient sales : + 2% pa to 264 Mt nutrients: Fertilizer: +1.7% pa; Industrial +3.6% pa
5. Global trade rising for all products between 2015 and 2019:
• Higher urea Import in SA and EU, but lower in USA and LA: Global urea trade at 52 Mt .
• Phosphate rock: growing imports in EA, EECA, Europe; trade may reach 34-35 Mt rock.
• Processed phosphates in SA, AF, LA: Global trade rising to 33 Mt products.
• Larger potash imports in LA, EA, SA; global trade at 55 Mt .
Uncertainties:
Energy prices /Shortfalls of natural gas supply
Access to financing /Completion delays
Policy: Export policy / Subsidy policies
- Afcome – Reims, France – October 21st - 23rd 2015 -
IFA Secretariat
www.fertilizer.org
José de Sousa
IFA Production and International Trade
Thank you for your attention
